From demonstrators to commercial CCS costs - Wilfried Maas, Shell & Member UK CCS Cost Reduction Task Force

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A presentation from the 2013 CCS Costs Workshop.

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From demonstrators to commercial CCS costs - Wilfried Maas, Shell & Member UK CCS Cost Reduction Task Force

  1. 1. From demonstrators to commercial CCS costs Dr. Wilfried Maas, Shell General Manager Technology Carbon Capture demonstration projects Member UK CCS Cost Reduction Task Force
  2. 2. • CCS demonstration projects can have high costs (from constraints and FOAK elements) – but will bring key first data points and thus establish the stepping stones for: • further reduction in CCS costs in a developing industry with – – – – – – T&S infrastructure sharing and Financing (derisking) and Scale and supply chain and Engineering and Technology and Retrofit on CCS ready // Greenfield clean power plants and ..
  3. 3. • Task force (CCSA chair) 25 participants: - Key cost components of CCS and the key cost reduction opportunities; - Routes to realising these cost reductions and the actions required - Commitment from industry on initiatives to reduce cost and the steps Government could take to establish the right market framework and incentives to encourage industry to invest - - 21/11/2012 Interim report 16/05/2013 final report - Inventory of gaps and actions 16/10/2013 Response from Government - CCS Development Forum UK CO2 Storage Development Group - UK CCS Commercial Development Group - UK CCS Knowledge Transfer Network - https://www.gov.uk/government/policy-advisory-groups/ccs-cost-reduction-task-force
  4. 4. Key Conclusion UK gas and power stations equipped with Capture, Transport and Storage have clear potential to be cost competitive with other forms of low carbon power generation, delivering electricity at levelised costs approaching 100 £/MWh by the early 2020s and at a cost significantly below 100 £/MWh soon thereafter.
  5. 5. Uncertainty in cost ranges
  6. 6. Sources for cost reduction • Commercial operation lifetimes from shorter duration demonstrators • Storage – – – – Liability and risk management Storage hubs Rate of injection Scale • Transport – Well designed network – Scale • Generation and Capture – – – – Scale up Capture technology improvements, specifically energy penalty Competitive supply chain Redundancy, integration and materials • Cost of Capital/Finance – Derisking of CCS chain – Suitable funding structures – Education and involvement of financial sector in CCS
  7. 7. Impact on cost vs uncertainty
  8. 8. Cost build up differ for fuel & technologies • Supporting demonstration for different fuels and technologies 140 Storage Opex 120 Storage Capex Transport Opex £/MWh 100 Transport Capex Carbon cost 80 Host plant additional fuel cost 60 Host plant additional Opex 40 Host plant additional Capex 20 Capture O&M Capture levelised Capex 0 Post Comb Gas 2020 Post Comb Coal 2020 Oxy Comb Coal 2020 Coal IGCC 2020 Ref fuel cost Ref plant O&M Ref plant levelised Capex
  9. 9. Modest cost reductions in base power plant costs • Reflecting maturity of base generation and fixed fuel price premises • Fuel price and base plant capex impact base power costs more than CCS costs • Base power cost contribute significantly to clean power costs 160 Storage Opex 140 Storage Capex Transport Opex 120 Transport Capex £/MWh 100 Carbon cost 80 Host plant additional fuel cost 60 Host plant additional Opex Host plant additional Capex 40 Capture O&M 20 Capture levelised Capex 0 Post Comb Gas 2013 Post Comb Gas 2020 Post Comb Gas 2028 Ref fuel cost Ref plant O&M Ref plant levelised Capex
  10. 10. Additional cost of Post Comb gas CCS • Substantial contribution from T&S infrastructure • Capture plant scale and lifetime • Additional fuel cost reduction through efficiency improvements 90 Storage Opex 80 Storage Capex 70 Transport Opex £/MWh 60 50 Transport Capex 40 Carbon cost 30 Host plant additional fuel cost 20 Host plant additional Opex 10 Host plant additional Capex 0 Post Comb Gas 2013 Post Comb Gas 2020 Post Comb Gas 2028 Capture O&M Capture levelised Capex
  11. 11. Additional cost of Post Comb Coal CCS • Substantial contribution from T&S infrastructure • Capture plant scale and lifetime • Additional fuel and capex reduction through efficiency 120 Storage Opex 100 Storage Capex Transport Opex £/MWh 80 Transport Capex 60 Carbon cost Host plant additional fuel cost 40 Host plant additional Opex 20 Host plant additional Capex Capture O&M 0 Post Comb Coal 2013 Post Comb Coal 2020 Post Comb Coal 2028 Capture levelised Capex
  12. 12. Study premises 2013 2020 2028 2013 2020 2028 Fuel/fuel price £/GJ Gas/7.3 Gas/7.3 Gas/7.3 Coal/3 Coal/3 Coal/3 MW capacity 300 600 600 300 800 800 Host % efficiency 54 56 56 43 45 45 Host plant capex £/kW 550 500 500 1400 1400 1400 Capture plant capex £/kW 813 726 626 1241 1103 932 Energy penalty % 19 14 11 25 18 15 Capture Efficiency % 85 90 90 85 90 90 Type Single T&S km On/ Offshore 30/300 Vol (mtpa)/ line size “ 1/10” Single 40/300 2/15” Cluster Single 40/300/ 30/300 x/36” 2/15” Single 40/300 4/18” Cluster 40/300/ x/36” Economic life (y) 25 25 15 25 25 10/14 8/12 10/15 10/14 8/12 15 WACC Gen, Cap & T/S 10/15
  13. 13. 7 Key next steps • Ensure optimal UK CCS transport and storage network configuration • Incentivise CO2 EOR to limit emissions and maximise UK hydrocarbon production • Ensure funding mechanisms are fit for purpose • Create bankable contracts • Create a vision for development of CCS in UK from follow on projects through to widespread adoption • Promote characterisation of UK CO2 Storage locations • Create policy and financing regimes for CCS from industrial CO2 – + 26 supporting steps – + 3 Development groups
  14. 14. Backup
  15. 15. CCS Cost build up differ for fuel & technologies 60 Storage Opex Storage Capex 40 £/MWh 50 Transport Opex Transport Capex 30 Carbon cost 20 Host plant additional fuel cost 10 Host plant additional Opex 0 Host plant additional Capex Post Comb Gas 2020 Post Comb Coal 2020 Oxy Comb Coal 2020 Coal IGCC 2020 Capture O&M Capture levelised Capex
  16. 16. Model background • Model described in – Potential cost reductions in CCS in the power sector Discussion Paper, May 2012. Department of Energy and Climate Change. Mott MacDonald • Adjusted by CRTF from MMD low cost pathway • New plant iso retrofit

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